Nervous about this...

[Allmixedup]

So here is the current situation...we are going to filing bk and are losing our home. We were going to move out quickly on our attorneys advice so we will have a housing expense. (I guess here in MI I can't use my house pmt since I am not paying for it...) Anyways, we decided to wait to move until the very end. We have not received an NOD as of yet, but I know it's coming soon. I can't move right now. Hubby isn't working and I am having a hard time saving the money to move even though we don't pay for our house anymore. I wanted to pay off the lawyer and get the ball rolling on the bk, but my fear is that we will have trouble since we are not paying a house payment and not paying rent as of yet.....

Does anyone have any experience with this and could possible chime in...Should I wait to file bk as well? Will the trustee understand that I just need a little time to save?? Or is that considered abuse? Do they ask questions about where you are living? I am thinking I want to file the bk now to get it over with..... Any one who can help answer this please help!!!

[JRScott]

What are you paying that is eating up the rest of your money if you aren't paying the mortgage?

[OhioFiler]

You would still include a housing expense on your schedule J. You'll have to live somewhere.

[LuciluS]

You are allowed to use the Michigan - Local Standards: Housing and Utilities
Here is the website & scroll down to your County.

http://www.irs.gov/businesses/small/article/0,,id=104915,00.html

[Allmixedup]

To Jrscott...my husband is layed off and unemployment is at least 1,000 less per month than he was making and that is almost the same amount as our mortgage payment. Not to mention we still have very high utilities from the winter I am trying to pay off. Two car notes, Ins., plus have to feed 5 people!!! As you can tell we were house poor and him losing that income was all it took to put us over the edge!! We know we need to save to move it will just take us a few months....

So when everyone says that we can use the housing expense, it doesn't matter then we are still rent free at the moment? That is what I was worried about.......

[LuciluS]

To Jrscott...my husband is layed off and unemployment is at least 1,000 less per month than he was making and that is almost the same amount as our mortgage payment. Not to mention we still have very high utilities from the winter I am trying to pay off. Two car notes, Ins., plus have to feed 5 people!!! As you can tell we were house poor and him losing that income was all it took to put us over the edge!! We know we need to save to move it will just take us a few months....

So when everyone says that we can use the housing expense, it doesn't matter then we are still rent free at the moment? That is what I was worried about.......

Sweetie:

Do you think by the time you pay to move, get utilities turned on, estimate the cost of utilities and estimate the rent....will you be better off to move or just stay there.

I cannot recall if you have retained an Attorney. If you have, try calling him.
I don't know how long you've lived in your home, but think about Everything when it comes to giving up the house. Most likely without the house, you probably won't be able to itemize on your tax returns. In no way am I trying to convince you to stay.

I just know you are Stressed due to hubby losing his job & you trying to pay the bills and keep food on the table. I told someone on this forum a couple of days ago to take a piece of paper & draw a line down the middle. On one side put Pro & the other side put Con. When you think of what expense you have on the home or just thinking about it, write it down in the appropriate column.

Maybe in a week or two or three, you can look at it and make a decision. Even though, you are not paying the mortgage, I think your Attorney will tell you are allowed to use your local standards.

I know, right now. you feel like your world is caving in. Sit back and take a deep breathe & let it out. Do that a couple of times and it might help you to relax a tad bit. Try doing it during the day too.

I know it's hard. I've been working all day on our Bankruptcy and now I cannot turn my neck as the left side is one big ole knot. Hubby tried rubbing it, but he was hitting bone. Took an Ultram and Flexeril. Our shih tzu got me up at 5:10 this morning, so may hit the hay now.

Have and will continue to keep you and your family in my Daily Prayers!

Hugs,

Luci

[bk2009]

Just pay the bare minimums on the utilities. Call them up and tell them your hubby lost his job - they can often put you on a six month repayment plan. Then include them in the bankruptcy.

Do you work? If not, go get some food stamps! If not, I think you really need to look closely at where your money is going.

Even with your DHs decrease in income, I'd think that you could afford to save for the attorney not paying a house payment!

I don't say that as someone who is not where you are. We are making a third of what DH was before he was laid off in January. We are current on our first and our second (with well over half of unemployment going to this). We eat. We pay our utilities. We buy gas for the vehicles.

[Allmixedup]

Lucilus,
I understand where you are coming from. I have done this and it just doesn't make sense for us to stay. Our house payment is 1200.00 and that doesn't include the ins. (700 per year) and taxes (2500 per year). That is a monthly cost of over 1500! We owe 131,000 on the house and there is a house across the street selling for 30,000! I don't care about the loss of worth at this point if I could afford the monthly payment! My hubby tried to call and work something out the other day and they (Beneficial arg!!) are only willing to lower the payment for 6 months. That is only a band-aid to us and we will be in the same boat after it goes back up! Not to mention if something breaks we never have any money to fix it! My house needs work and I can't do any of it! I just think we are ready to move on at this point. I have went over this time and time again and I can't seem to find a good reason to stay....

[DeadManCrawling]

I believe a point has been missed:

I think the general suggestion is that you consider staying in your home through the foreclosure process and save money. The foreclosure will likely take some time, depending on your state/district, and you can live there rent-free until the process is over, thus positioning your family better financially for a rental down the road.

Do you have a compelling need to file BK immediately or is it a desire to get this all over with quickly?

If the goal is to be quick for the sake of stress-relief, I really hope you will at least take a few weeks to think things through and learn more about the foreclosure timeline. It can take a very long time, allow you to save money, and then get a rental before filing BK in the future.

We are now 2.5 years of nonpayment to all debt except utilities. We are 8 months since a mortgage payment and the foreclosure process hasnt even begun. We have saved enough money at this point to purchase another house with no mortgage, and will do so. Not everyone has that kind of time in the foreclosure process, but why hurry the matter if you can stay in teh house and save cash?

Also, you will continue to be responsible for some of the household expenses even if you abandon it, in most cases. Things like insurance, HOA fees, possibly some maintenance and so on. Locking the place up and moving into a rental does NOT necessarily mean that you are free and clear of the expenses of the place. Some of those will be your obligation until the lender finishes foreclosing and transfers the deed. Many lenders are in no hurry at all to take over expenses that you are, for the time being, responsible for.

Good luck in your decisions on this and everything you are dealing with, we are all in the same place, to one extent or another, and you certainly have my best wishes.

[LuciluS]

Lucilus,
I understand where you are coming from. I have done this and it just doesn't make sense for us to stay. Our house payment is 1200.00 and that doesn't include the ins. (700 per year) and taxes (2500 per year). That is a monthly cost of over 1500! We owe 131,000 on the house and there is a house across the street selling for 30,000! I don't care about the loss of worth at this point if I could afford the monthly payment! My hubby tried to call and work something out the other day and they (Beneficial arg!!) are only willing to lower the payment for 6 months. That is only a band-aid to us and we will be in the same boat after it goes back up! Not to mention if something breaks we never have any money to fix it! My house needs work and I can't do any of it! I just think we are ready to move on at this point. I have went over this time and time again and I can't seem to find a good reason to stay....

O My! That is a lot of monthly money going out. Don't blame you. Well, I'm almost positive if you stay there until you find a rental, you are allowed the local standard housing allowance. I'm sure it is much lower than when you were making house payments, but at least it's something to use if you have to file before finding a rental.

Unless you have a judgement or garnishment staring you in the face, take time about filing. I know you need two cars, but anyway to try a 722 redemption and get a later model car? You can google it. It is with US Bank, but only for new customers.

Sheesh, we haven't paid on our CCs' since last Sept. except one I paid through Dec. Most are sold to a collection agency. Don't answer the phone anymore at the advice of our BK Attorney.

I wish I had more answers for you as I know it has to be so taxing especially with children. Hang in there Sweetie. Will be praying things will look better in a couple of weeks for ya'll.

Hugs,

Luci

[lrprn]

The problem here is that there are a few bk courts that because of case law decisions in that court won't allow a filer to use their mortgage payment as an expense on their bk forms if they intend to surrender the home.

Allmixedup might be in one of those districts, which could be why her lawyer is advising her to abandon the house to get a rental before filing so she can use the rent as an expense when she files.

This is another of those inconsistencies between districts and courts that can drive filers crazy and cause us here to constantly caution about asking what the practices are in your court. There shouldn't be this much variance in how the law in interpreted based on where a filer lives, but unfortunately, it's real and has to be accounted for when getting and giving suggestions about specific situations here.

[Allmixedup]

Thank you for all of the input! Deadmancrawling, I agree with you about saving and living rent free. That is my goal. I am not in a hurry to file bk except that one of my cars might be paid off before then and that will also free up 250 per month. I don't want to have too much disposable income left and not be able to file a chapter 7! I don't mean to be so indecisive, I just do kind of want to put all of this behind me already.
And to lrprn, yes I think that you are right about my district. I think that I would be ok if they use the housing allowance though. I tried asking them these questions before and she basically said that it is just easier if you are in the rental already.

[Allmixedup]

I think that I am going to call the lawyer and tell them that we intend to stay until the end. Then they will have to tell me either 1. we use the housing expense and still go forward with the filing, or 2. we hold off until the end and start the bk process again when that time comes cuz who knows how long it will be until this house isn't in our name....

[DeadManCrawling]

There are many ways to delay the foreclosure for a very long time. Some couples have filed for BK a few days before the sale date, but filed singly. Then they wait until the sale date is rescheduled after that bk is either disharged or dismissed and the other spouse files. Simply answering motions in court to ask for more time or dispute small matters can drag things out a very long time.

I read of one case where the homeowner filed a motion to request an extra 30 days to respond, to gather paperwork. The hearing for their 30 day motion was held SIX MONTHS later, and they were granted the 30 days. Your attorney, or a foreclosure attorney, can stretch this out longer for you.

There are tales on attorney forums about this issue. Some attorneys are contracted for a flat rate by the lenders. They get paid the same amount per foreclosure. Therefore anyone who responds in court is shuffled to the bottom of the deck and sorta forgotten while they foreclose on the fish who don't bite back. Because there are so many foreclosures occurring every week, these folks with the fighting spirit can go a long time indeed before they need to move.

Best wishes in all your decisions on this.